Alibaba Lands First Major Client for New AI Chip amidst US-China Tech Clash
BEIJING - September 17, 2024 – Alibaba has secured its first meaningful customer for its domestically produced AI chip, signaling a potential breakthrough in China’s efforts to reduce reliance on foreign technology as tensions with the United States escalate. The development comes as China restricts major tech companies from purchasing advanced AI chips from NVIDIA, including the RTX Pro 6000D, and together investigates NVIDIA for potential anti-monopoly violations.
The news coincides with Alibaba’s recent fiscal Q1 2026 earnings report, which showed consolidated revenue of $34.57 billion, a 2% year-over-year increase (or 10% excluding divested businesses). While adjusted net income fell 18% year-over-year to $4.68 billion, GAAP net income rose 76% to $5.92 billion, driven by equity investment gains and the sale of Trendyol’s local consumer services business.
A key driver of Alibaba’s positive outlook is the robust growth of its AI business.Alibaba Cloud, the company’s cloud computing division, reported a 26% year-over-year revenue increase, with AI-related product revenue experiencing triple-digit growth for the eighth consecutive quarter. This momentum underscores increasing market adoption of Alibaba’s AI solutions and the strategic importance of its in-house chip development.
The Chinese government’s recent ban on NVIDIA’s RTX Pro 6000D – a chip based on NVIDIA’s advanced Blackwell architecture – builds on earlier restrictions and reflects a broader push for technological self-sufficiency. The move also includes an antitrust probe by the State Management for Market regulation (SAMR) into NVIDIA, focusing on its 2020 acquisition of Mellanox Technologies.
